Eagle Rock Consulting Group LLC. Edoardo Cuomo, Joseph Joyce, Jillian Kupcha, Mathew Fogel, Gianna Riccoboni Safeway INC. AB A Who is Safeway? Second biggest grocery chain in the United States - 12 distribution centers Currently in low-price supermarket industry History April 1912: Sam Seeling Company founded, single grocery store in Los Angeles After WWI: bought by W.R.H. Weldon 1925: Safeway becomes name 1927: Initial Public Offering 1947: Sales exceeded $1 billion for first time Present: 1418 stores in the United States Whats Next? Challenge Responses Implementation The Challenge Safeway once had a strong market hold Supermarket industry has changed radically Safeways market share continues to decrease Lacks a clear distinctive market position The Challenge Discount vs. High-End Grocer Increased competition from: No longer profitable to compete with these companies Our Future Safeway must conform to new standards Build a concrete stance; upper- scale segment Whats Next? Challenge Responses Implementation Response Becoming a high end brand in the consumer/customer service grocery segment Implement a differentiation strategy with a mix of store improvements, better customer service, higher quality products Top Complaints Delivery Service Those whom frequently need delivery -Consumers that rarely have time to shop Offer discounts to consistent delivery customers In Store Pick-up Anybody -Visible emphasis -Quality image -Change perception of shopping Day Care Improve the experience at the stores Place for kids Better for kids and parents Atmosphere Better eating area Better Wi-Fi connection Better Quality and Customer Service Training employees Well informed about the products Suggest products to customers Suggest to use the Just For U program Whats Next? Challenge Responses Implementation Implementation Renovate stores Increase customer service Higher Quality Additional Store Features Logistics Course of action: -5 test locations -All in California -6 months to renovate and train employees -Test locations for 18 months Financials Financials Renovations17,250,000 Day Care700,000 Advertising500,000 Quality Control/Training100,000 Delivery/Pick-up450,000 Total19,000,000 Financials Lifestyle Renovations Total Cost New StoresRenovations 927,000, Store Totals / /12 Per store80,000,00017,250,000 Budget Over estimate $20 million per store Total of the whole project 2 years $100 million total Out of $200 million dollars Extra money removed for future Larger Plan Bring all Safeway's to the high end market Implement over the next 10 years Rebuild the brand Additional Financial Slides Day Care Insurance - $2,000* a year Food - $2.50 per child $3,000 $2,000 Employees 31,186* 15 an hour 2080 hours a year 5 employees $155,954 Supplies/equp - $450 per child 1,200 800 $540,000 $360,000*experts-how-much-does-child-care-insurance- cost/ Quality Control NSF GFTC is the company that we found does training courses in quality and customer service (consulting firm)details.aspx?course=FST14 Total employees: 171,000 Total Stores 1418 Average per store 121 Training per employee= *121= 63, 525 Deliver and Pick-Upserieswagon/ Two Delivery trucks $50,000 each -Ford starting at $31,000 -Add customization Extra money for more training and additional employee salaries over next 18 months ($350,000)